In This Article:
It looks like Reliance Industrial Infrastructure Limited (NSE:RIIL) is about to go ex-dividend in the next 3 days. You will need to purchase shares before the 20th of August to receive the dividend, which will be paid on the 9th of September.
Reliance Industrial Infrastructure's next dividend payment will be ₹3.00 per share. Last year, in total, the company distributed ₹3.00 to shareholders. Last year's total dividend payments show that Reliance Industrial Infrastructure has a trailing yield of 1.1% on the current share price of ₹267.15. If you buy this business for its dividend, you should have an idea of whether Reliance Industrial Infrastructure's dividend is reliable and sustainable. We need to see whether the dividend is covered by earnings and if it's growing.
View our latest analysis for Reliance Industrial Infrastructure
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Reliance Industrial Infrastructure's payout ratio is modest, at just 49% of profit. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It paid out more than half (58%) of its free cash flow in the past year, which is within an average range for most companies.
It's positive to see that Reliance Industrial Infrastructure's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Readers will understand then, why we're concerned to see Reliance Industrial Infrastructure's earnings per share have dropped 17% a year over the past five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Reliance Industrial Infrastructure's dividend payments per share have declined at 1.5% per year on average over the past 10 years, which is uninspiring.